Local Insights From the NAR Profile of Homebuyers and Homesellers
November 16, 2020 Research & Data, NAR Updates, Industry News CCIAOR Data and Research
While Cape Cod, Martha’s Vineyard, and Nantucket have felt the shift in the real estate market, it’s not unique to just here. The coronavirus pandemic initiated several shifts in America's housing market over the past eight months. Changes in the behaviors of home buyers and sellers were especially notable as buyers' usual tendencies altered, and the urgency to sell accelerated, according to new data from the the National Association of Realtors®' 2020 Profile of Home Buyers and Sellers,1 a yearly report which discusses demographics, preferences and experiences of buyers and sellers across America.
Those who completed their transaction after March were more likely to purchase a multi-generational home. Multigenerational home purchases accounted for 15% of sales after March, compared to 11% for those who closed before April. In light of stay-at-home orders, instituted within the early weeks of the pandemic, 14% of buyers who bought after March said their transaction was delayed because of COVID-19.
"The coronavirus without a doubt led home buyers to reassess their housing situations and even reconsider home sizes and destinations," said Jessica Lautz, vice president of demographics and behavioral insights at NAR.
"Buyers sought housing with more rooms, more square footage and more yard space, as they may have desired a home office or home gym," she added. "They also shopped for larger homes because extra space would allow households to better accommodate older adult relatives or young adults that are now living within the residence."
Among other updated statistics, this year's report includes two new sections on active home buyers and sellers during the COVID-19 pandemic. Purchases and sales that closed in April 2020 or after are considered transactions that occurred during the pandemic. The survey evaluated buyers' and sellers' behaviors prior to the virus taking shape and then assessed consumer and seller patterns in the midst of the outbreak.
Five percent of buyers who purchased after March did so without physically seeing the home in-person, compared to 3% of buyers who purchased before April. Those who went to closing after March were less likely to be denied by a lender – 2% compared to 5% for pre-April buyers. This group also had higher household incomes – $100,800 compared to $94,400 for pre-April buyers.
Nationwide, listings received 99% of their asking price
This number is slightly higher than what we are seeing on the Cape and Islands where homes are receiving 97.02% of their original list price since June 1. Homes that are priced right and move-in-ready are primed for a quick sale, with 44% of all homebuyers looking to avoid renovations and problems with plumbing or electricity.
Data from this survey also suggests that heating and cooling costs were the most important features for recent homebuyers, with 83% finding these features at least somewhat important. This suggests that homesellers should consider investing in upgraded HVAC systems as they check off a box high on a buyer’s list of demands.
Demand for Downsizing Subsides as Larger Homes in Demand
Fourteen percent of sellers listed a home being too small as the top reason for selling their home, just one percentage point behind the desire to be closer to family and friends. With a trend towards remote work, flexible schedules and an increasing number of jobs being work-from-home for the foreseeable future, a desire for more living space makes sense in this context.
While downsizing was uncommon, sellers over the age of 55 did downsize by an average of 100 square feet. However, these sellers often found a more affordable location when relocating.
Homebuyers were more likely to purchase a multi-generational home since the start of COVID-19 in March - 15% versus 11%
Interest in multi-generational living re-emerged with the start of stay-at-home orders and covid quarantines, with families looking to live with or closer to other family members. Buyers were seeking out larger homes that could better accommodate adult relatives or young adults now living in the residence.
REALTORS® continue to play a large role in real estate transactions - 88% purchased their home through a real estate agent or broker, and 73% of buyers interviewed only one agent. For sellers, 89% worked with a real estate agent to sell their home.
This statistic underscores the important role that REALTORS® play in the home buying and selling process - the overwhelming majority of transactions were conducted with an agent involved. This also reinforces the importance of connecting with consumers, as most buyers are hiring the first agent they interview. Being visible and relevant to current and potential clients has never been more important.
Nearly a quarter of all homes sold during the pandemic were $500,000 or more.
High demand and tight supply has pushed the median sale price of homes ever higher during the pandemic, with almost 1/4th of all homes sold nationally selling for over $500,000, and the median sale price in Barnstable County reaching $550,000 in September, a 22.2% increase over the same time frame in 2019. This trend was even more pronounced on Cape Cod, where 54.09% of all home sales closed since May 1st were for $500,000 or more.
About NAR's Survey
NAR mailed a 131-question survey in July 2020 using a random sample weighted to be representative of sales on a geographic basis to 132,550 recent home buyers. Respondents had the option to fill out the survey via hard copy or online; the online survey was available in English and Spanish. A total of 8,212 responses were received from primary residence buyers. After accounting for undeliverable questionnaires, the survey had an adjusted response rate of 6.2%. The sample at the 95% confidence level has a confidence interval of plus-or-minus 1.08%. Recent home buyers had to have purchased a primary residence home between July of 2019 and June of 2020.